A publicly traded software firm that is based in New York, namely Future FinTech announced its latest acquisition. In order to venture into Bitcoin mining FinTech acquired a Chinese Mining Farm, Nanjing Ribensi Electronic Technology Co.
The New York-based company bought the Chinese mining farm for a whooping sum of $9 million as was revealed in a press release. According to the terms and conditions of their contract FinTech has agreed to take complete ownership of the mining operations of Nanjing. Included in this deal are 30,000 ASICs which are situated in the Sichuan region which is known has China’s hydro-rich region. However, the Chinese company’s present employees will resume working on the farms.
According to the Chief Executive Officer of Fintech, it was the low cost of energy that played a role in making this significant decision.
He explained that the predicted low energy cost would generate more profit while enabling the company to adopt advanced Bitcoin. The energy costs are low since the mining farm uses local low-cost hydroelectricity to operate the machines used for mining.
In the statement, it was also revealed that by 2023 there was a guaranteed probability of earning profit between $2 million and $4 million. The press release also claimed that if these profits were not earned then shareholders of the Chinese company would fill in the gap.
In the SEC filing of Future FinTech, it was also shown that the company in order to raise $35 million issued new shares.
Future FinTech’s procurement occurs at a stage when interest from conventional companies towards Bitcoin and its progeny of digital assets has never been higher.
A major drawback of Bitcoin or other crypto tokens is that it is energy-intensive, which means it uses a lot of energy. When it comes to energy consumption, Bitcoin is using the majority of renewable energy. People have input into that business a cost that is the energy cost. So what they are essentially doing is that they’re going to find the lowest cost energy which happens to be renewable.
Bitcoin mining requires to use a lot of energy and this is probably why countries with energy crisis are mining the activity altogether. About 38% of the electricity needed to run the operation is just to cool the electronics.
There are things like gas flaring, waste-to-energy, geothermal, hydroelectric etc. so this drives a lot of innovation.
There is definitely some non-renewable energy. However, there are many studies that have now come public where 60-80% of energy consumption is renewable energy in total.
The cost of mining varies dramatically depends on what country the farm is based in and how much the energy costs.
While the crypto industry is gaining lots of adulation, it does come at some cost and in this case the cost is energy.